[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[H.R. 976 Engrossed in House (EH)]

  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
110th CONGRESS
  1st Session
                                H. R. 976

_______________________________________________________________________

                                 AN ACT


 
 To amend the Internal Revenue Code of 1986 to provide tax relief for 
               small businesses, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE; AMENDMENT OF 1986 CODE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Small Business Tax 
Relief Act of 2007''.
    (b) Amendment of 1986 Code.--Except as otherwise expressly 
provided, whenever in this Act an amendment or repeal is expressed in 
terms of an amendment to, or repeal of, a section or other provision, 
the reference shall be considered to be made to a section or other 
provision of the Internal Revenue Code of 1986.
    (c) Table of Contents.--The table of contents of this Act is as 
follows:

Sec. ?1.?Short title; amendment of 1986 Code; table of contents.
Sec. ?2.?Extension and modification of work opportunity tax credit.
Sec. ?3.?Extension and increase of expensing for small business.
Sec. ?4.?Determination of credit for certain taxes paid with respect to 
                            employee cash tips.
Sec. ?5.?Waiver of individual and corporate alternative minimum tax 
                            limits on work opportunity credit and 
                            credit for taxes paid with respect to 
                            employee cash tips.
Sec. ?6.?Family business tax simplification.
Sec. ?7.?Denial of lowest capital gains rate for certain dependents.
Sec. ?8.?Suspension of certain penalties and interest.
Sec. ?9.?Time for payment of corporate estimated taxes.

SEC. 2. EXTENSION AND MODIFICATION OF WORK OPPORTUNITY TAX CREDIT.

    (a) Extension.--Section 51(c)(4)(B) (relating to termination) is 
amended by striking ``2007'' and inserting ``2008''.
    (b) Increase in Maximum Age for Designated Community Residents.--
            (1) In general.--Paragraph (5) of section 51(d) is amended 
        to read as follows:
            ``(5) Designated community residents.--
                    ``(A) In general.--The term `designated community 
                resident' means any individual who is certified by the 
                designated local agency--
                            ``(i) as having attained age 18 but not age 
                        40 on the hiring date, and
                            ``(ii) as having his principal place of 
                        abode within an empowerment zone, enterprise 
                        community, or renewal community.
                    ``(B) Individual must continue to reside in zone or 
                community.--In the case of a designated community 
                resident, the term `qualified wages' shall not include 
                wages paid or incurred for services performed while the 
                individual's principal place of abode is outside an 
                empowerment zone, enterprise community, or renewal 
                community.''.
            (2) Conforming amendment.--Subparagraph (D) of section 
        51(d)(1) is amended to read as follows:
                    ``(D) a designated community resident,''.
    (c) Clarification of Treatment of Individuals Under Individual Work 
Plans.--Subparagraph (B) of section 51(d)(6) (relating to vocational 
rehabilitation referral) is amended by striking ``or'' at the end of 
clause (i), by striking the period at the end of clause (ii) and 
inserting ``, or'', and by adding at the end the following new clause:
                            ``(iii) an individual work plan developed 
                        and implemented by an employment network 
                        pursuant to subsection (g) of section 1148 of 
                        the Social Security Act with respect to which 
                        the requirements of such subsection are met.''.
    (d) Treatment of Disabled Veterans Under the Work Opportunity Tax 
Credit.--
            (1) Disabled veterans treated as members of targeted 
        group.--
                    (A) In general.--Subparagraph (A) of section 
                51(d)(3) (relating to qualified veteran) is amended by 
                striking ``agency as being a member of a family'' and 
                all that follows and inserting ``agency as--
                            ``(i) being a member of a family receiving 
                        assistance under a food stamp program under the 
                        Food Stamp Act of 1977 for at least a 3-month 
                        period ending during the 12-month period ending 
                        on the hiring date, or
                            ``(ii) entitled to compensation for a 
                        service-connected disability, and--
                                    ``(I) having a hiring date which is 
                                not more that 1 year after having been 
                                discharged or released from active duty 
                                in the Armed Forces of the United 
                                States, or
                                    ``(II) having aggregate periods of 
                                unemployment during the 1-year period 
                                ending on the hiring date which equal 
                                or exceed 6 months.''.
                    (B) Definitions.--Paragraph (3) of section 51(d) is 
                amended by adding at the end the following new 
                subparagraph:
                    ``(C) Other definitions.--For purposes of 
                subparagraph (A), the terms `compensation' and 
                `service-connected' have the meanings given such terms 
                under section 101 of title 38, United States Code.''.
            (2) Increase in amount of wages taken into account for 
        disabled veterans.--Paragraph (3) of section 51(b) is amended--
                    (A) by inserting ``($12,000 per year in the case of 
                any individual who is a qualified veteran by reason of 
                subsection (d)(3)(A)(ii))'' before the period at the 
                end, and
                    (B) by striking ``Only first $6,000 of'' in the 
                heading and inserting ``Limitation on''.
    (e) Effective Date.--The amendments made by this section shall 
apply to individuals who begin work for the employer after the date of 
the enactment of this Act.

SEC. 3. EXTENSION AND INCREASE OF EXPENSING FOR SMALL BUSINESS.

    (a) Extension.--Subsections (b)(1), (b)(2), (b)(5), (c)(2), and 
(d)(1)(A)(ii) of section 179 (relating to election to expense certain 
depreciable business assets) are each amended by striking ``2010'' and 
inserting ``2011''.
    (b) Increase in Limitations.--Subsection (b) of section 179 is 
amended--
            (1) by striking ``$100,000 in the case of taxable years 
        beginning after 2002'' in paragraph (1) and inserting 
        ``$125,000 in the case of taxable years beginning after 2006'', 
        and
            (2) by striking ``$400,000 in the case of taxable years 
        beginning after 2002'' in paragraph (2) and inserting 
        ``$500,000 in the case of taxable years beginning after 2006''.
    (c) Inflation Adjustment.--Subparagraph (A) of section 179(b)(5) is 
amended--
            (1) by striking ``2003'' and inserting ``2007'',
            (2) by striking ``$100,000 and $400,000'' and inserting 
        ``$125,000 and $500,000'', and
            (3) by striking ``2002'' in clause (ii) and inserting 
        ``2006''.
    (d) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2006.

SEC. 4. DETERMINATION OF CREDIT FOR CERTAIN TAXES PAID WITH RESPECT TO 
              EMPLOYEE CASH TIPS.

    (a) In General.--Subparagraph (B) of section 45B(b)(1) is amended 
by inserting ``as in effect on January 1, 2007, and'' before 
``determined without regard to''.
    (b) Effective Date.--The amendment made by this section shall apply 
to tips received for services performed after December 31, 2006.

SEC. 5. WAIVER OF INDIVIDUAL AND CORPORATE ALTERNATIVE MINIMUM TAX 
              LIMITS ON WORK OPPORTUNITY CREDIT AND CREDIT FOR TAXES 
              PAID WITH RESPECT TO EMPLOYEE CASH TIPS.

    (a) Allowance Against Alternative Minimum Tax.--Subparagraph (B) of 
section 38(c)(4) is amended by striking ``and'' at the end of clause 
(i), by inserting a comma at the end of clause (ii), and by adding at 
the end the following new clauses:
                            ``(iii) the credit determined under section 
                        45B, and
                            ``(iv) the credit determined under section 
                        51.''.
    (b) Effective Date.--The amendments made by this section shall 
apply to credits determined under sections 45B and 51 of the Internal 
Revenue Code of 1986 in taxable years beginning after December 31, 
2006, and to carrybacks of such credits.

SEC. 6. FAMILY BUSINESS TAX SIMPLIFICATION.

    (a) In General.--Section 761 (defining terms for purposes of 
partnerships) is amended by redesignating subsection (f) as subsection 
(g) and by inserting after subsection (e) the following new subsection:
    ``(f) Qualified Joint Venture.--
            ``(1) In general.--In the case of a qualified joint venture 
        conducted by a husband and wife who file a joint return for the 
        taxable year, for purposes of this title--
                    ``(A) such joint venture shall not be treated as a 
                partnership,
                    ``(B) all items of income, gain, loss, deduction, 
                and credit shall be divided between the spouses in 
                accordance with their respective interests in the 
                venture, and
                    ``(C) each spouse shall take into account such 
                spouse's respective share of such items as if they were 
                attributable to a trade or business conducted by such 
                spouse as a sole proprietor.
            ``(2) Qualified joint venture.--For purposes of paragraph 
        (1), the term `qualified joint venture' means any joint venture 
        involving the conduct of a trade or business if--
                    ``(A) the only members of such joint venture are a 
                husband and wife,
                    ``(B) both spouses materially participate (within 
                the meaning of section 469(h) without regard to 
                paragraph (5) thereof) in such trade or business, and
                    ``(C) both spouses elect the application of this 
                subsection.''.
    (b) Net Earnings From Self-Employment.--
            (1) Subsection (a) of section 1402 (defining net earnings 
        from self-employment) is amended by striking ``, and'' at the 
        end of paragraph (15) and inserting a semicolon, by striking 
        the period at the end of paragraph (16) and inserting ``; 
        and'', and by inserting after paragraph (16) the following new 
        paragraph:
            ``(17) notwithstanding the preceding provisions of this 
        subsection, each spouse's share of income or loss from a 
        qualified joint venture shall be taken into account as provided 
        in section 761(f) in determining net earnings from self-
        employment of such spouse.''.
            (2) Subsection (a) of section 211 of the Social Security 
        Act (defining net earnings from self-employment) is amended by 
        striking ``and'' at the end of paragraph (14), by striking the 
        period at the end of paragraph (15) and inserting ``; and'', 
        and by inserting after paragraph (15) the following new 
        paragraph:
            ``(16) Notwithstanding the preceding provisions of this 
        subsection, each spouse's share of income or loss from a 
        qualified joint venture shall be taken into account as provided 
        in section 761(f) of the Internal Revenue Code of 1986 in 
        determining net earnings from self-employment of such 
        spouse.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2006.

SEC. 7. DENIAL OF LOWEST CAPITAL GAINS RATE FOR CERTAIN DEPENDENTS.

    (a) In General.--Subsection (h) of section 1 is amended by adding 
at the end the following new paragraph:
            ``(12) Certain individuals not eligible for lowest rate.--
                    ``(A) In general.--In the case of an individual 
                described in subparagraph (B)--
                            ``(i) the amount determined under paragraph 
                        (1)(A)(ii)(II) shall not be less than the 
                        amount of taxable income which would (without 
                        regard to this subsection) be taxed at a rate 
                        below 15 percent, and
                            ``(ii) the sum of the amounts determined 
                        under subparagraphs (B) and (C) of paragraph 
                        (1) shall be an amount equal to the rate of tax 
                        specified in paragraph (1)(C) multiplied by so 
                        much of the adjusted net capital gain (or, if 
                        less, taxable income) as exceeds the excess (if 
                        any) of--
                                    ``(I) the amount of taxable income 
                                which would (without regard to this 
                                subsection) be taxed at a rate below 15 
                                percent, over
                                    ``(II) the taxable income reduced 
                                by the adjusted net capital gain.
                    ``(B) Individuals to whom paragraph applies.--
                            ``(i) In general.--For purposes of this 
                        paragraph, an individual is described in this 
                        subparagraph if--
                                    ``(I) such individual meets the age 
                                requirements of section 152(c)(3) 
                                (determined without regard to 
                                subparagraph (B) thereof), and
                                    ``(II) such individual's earned 
                                income (as defined in section 
                                911(d)(2)) for the taxable year does 
                                not exceed one-half of such 
                                individual's support (within the 
                                meaning of section 152) for such 
                                taxable year.
                            ``(ii) Special rules for joint returns.--In 
                        the case of a joint return--
                                    ``(I) the taxpayer and the 
                                taxpayer's spouse shall be treated as a 
                                single individual for purposes of 
                                applying subclause (II) of clause (i), 
                                and
                                    ``(II) the taxpayer shall be 
                                treated as an individual described in 
                                this subparagraph only if the taxpayer 
                                and the taxpayer's spouse are described 
                                in clause (i) (determined after 
                                application of subclause (I)).''.
    (b) Alternative Minimum Tax.--Section 55 is amended by adding at 
the end the following new subsection:
    ``(f) Certain Individuals Not Eligible for Lowest Rate.--In the 
case of an individual described in section 1(h)(12)(B), no amount shall 
be determined under subsection (b)(3)(B).''.
    (c) Coordination With Sunset of Provisions of the Jobs and Growth 
Tax Relief Reconciliation Act of 2003.--Subparagraph (A) of section 
1(h)(12), as added by this section, is amended by striking ``and'' at 
the end of clause (i), by striking the period at the end of clause (ii) 
and inserting ``, and'', and by adding at the end the following new 
clause:
                            ``(iii) no amount of qualified 5-year gain 
                        shall be taken into account under subparagraph 
                        (A) of paragraph (2) (as in effect after the 
                        application of section 303 of the Jobs and 
                        Growth Tax Relief Reconciliation Act of 
                        2003).''.
    (d) Effective Date.--
            (1) In general.--Except as provided in paragraph (2), the 
        amendments made by this section shall apply to taxable years 
        beginning after December 31, 2006.
            (2) Sunset of jgtrra.--The amendment made by subsection (c) 
        shall apply to taxable years beginning after the date specified 
        in section 303 of the Jobs and Growth Tax Relief Reconciliation 
        Act of 2003.

SEC. 8. SUSPENSION OF CERTAIN PENALTIES AND INTEREST.

    (a) In General.--Paragraphs (1)(A) and (3)(A) of section 6404(g) 
are each amended by striking ``18-month period'' and inserting ``22-
month period''.
    (b) Effective Date.--The amendments made by this section shall 
apply to notices provided by the Secretary of the Treasury, or his 
delegate, after the date which is 6 months after the date of the 
enactment of this Act.

SEC. 9. TIME FOR PAYMENT OF CORPORATE ESTIMATED TAXES.

    Subparagraph (B) of section 401(1) of the Tax Increase Prevention 
and Reconciliation Act of 2005 is amended by striking ``106.25 
percent'' and inserting ``112.75 percent''.

            Passed the House of Representatives February 16, 2007.

            Attest:

                                                                 Clerk.
110th CONGRESS

  1st Session

                               H. R. 976

_______________________________________________________________________

                                 AN ACT

 To amend the Internal Revenue Code of 1986 to provide tax relief for 
               small businesses, and for other purposes.